2023 ACA Reporting Requirements: Reference Guide

National Employee Benefits Practice

This article serves as a reference guide with detailed information for employers completing Affordable Care Act (ACA) reporting for the 2023 calendar year.

Be sure to take note of the new electronic filing requirements for 2024.

Read on for more information. Risk Strategies is here to help. Contact us directly with any questions at benefits@risk-strategies.com.

Quick Links

ACA Reporting: 2023 Calendar Year Requirements

  • Internal Revenue Code §6055: Minimum Essential Coverage (MEC)

    Self-funded health plan sponsors and health insurance carriers must provide covered individuals and the Internal Revenue Service (IRS) with information on minimum essential coverage (MEC) for a calendar year. This information is used for the individual mandate, as required by state law.

    • Individual Mandate (Federal): Tax legislation enacted in 2017 and effective in 2019 reduced the shared responsibility payment associated with the individual mandate to $0.
  • Internal Revenue Code §6056: Applicable Large Employer (ALE)

    An applicable large employer (ALE) is one with at least 50 full-time employees, including full-time equivalent employees (FTEs), on average during the prior calendar year. ALEs are required to provide full-time employees and the IRS with information regarding an offer of affordable, minimum value health plan coverage during the calendar year.

    • Affordable” Coverage: For plan years beginning January 1, 2024, the IRS set the affordability percentage at 8.39%. Click here for a recent Risk Strategies article with more information.
    • “Minimum Value” Coverage: A plan provides minimum value if it covers at least 60% of the total allowed costs and provides substantial coverage of inpatient hospital and physician services.
    • This information is used for the employer mandate and for premium tax credit eligibility for individuals. Click here for a prior Risk Strategies article with background information on ACA premium tax credits and the ACA “family glitch” correction.

ACA Reporting: Forms

Forms 1094-C and 1095-C (“C” Forms)

The “C” forms are used by ALEs to report offers of coverage to full-time employees to comply with the employer mandate and by self-funded ALEs to report minimum essential coverage (MEC).

  • Form 1094-C
    • Cover page for submission of all Forms 1095-C to the IRS
  • Form 1095-C
    • Identifies each full-time employee and the offer of coverage
    • For self-funded plans, provides information regarding individuals covered by the plan
Form 1095-C Overview: Lines 14 - 16

Scroll through the items below for an overview of the content that may be populated on lines 14, 15, and 16 of Form 1095-C.

ACA-Form-1095-C-Codes-Slide-1
ACA-Form-1095-C-Codes-Slide-2
ACA-Form-1095-C-Codes-Slide-3
ACA-Form-1095-C-Codes-Slide-4
Forms 1094-B and 1095-B (“B” Forms)

The “B” forms are used by health insurance carriers and also by small employers with self-funded/level-funded health plans and multiemployer plans to report individuals who had minimum essential coverage (MEC) during the calendar year.

  • Form 1094-B
    • Cover page for submission of all Forms 1095-B to the IRS
  • Form 1095-B
    • Identifies health coverage for an individual and any covered family member

ACA Reporting: Requirements Snapshot

The table below summaries the ACA reporting requirements based on employer and plan type:

Employer & Plan Type

Reporting Entity

IRS Transmittal Form

IRS Return

Employee Statement

ALE with fully insured group health plan

Health Insurance Carrier

Form 1094-B

Form 1095-B

Form 1095-B

Employer

Form 1094-C

Form 1095-C

Form 1095-C (or alternative method)

ALE with self-funded group health plan

Employer

Form 1094-C

Form 1095-C

Form 1095-C (or alternative method)

Non-ALE with fully group insured health plan

Health insurance carrier

Form 1094-B

Form 1095-B

Form 1095-B

Non-ALE with self-funded/level-funded group health plan

Employer

Form 1094-B

Form 1095-B

Form 1095-B

ACA Reporting: Deadlines

The table below summarizes the ACA reporting deadlines for all ALEs in 2024, regardless of plan year:

Deadline

ACA Reporting Item

Employer Actions

March 1, 2024*

Forms sent to employees/other individuals (e.g., part-time employees, retirees, COBRA enrollees)

ALEs and non-ALEs who offer self-funded/level-funded plans must distribute Forms 1095 to employees by March 1, 2024.

April 1, 2024**

ACA Reporting to IRS (electronic filing)

ALEs and non-ALEs who offer self-funded/level-funded plans must submit Forms 1095 and 1094 to the IRS by April 1, 2024.

* Although the 30-day extended deadline is typically March 2 of each year, the deadline for the 2023 calendar year is March 1, 2024, since 2024 is a leap year.

** Although the deadline is typically March 31 of each year, the deadline for the 2023 calendar year is Monday, April 1, 2024, since March 31 falls on a Sunday in 2024.

ACA Reporting: Electronic Filing Required for 10+ Forms

For 2024, employers must aggregate all tax information returns and are required to electronically file all tax information forms, including Forms 1095, if that number exceeds 10. Click here for a prior Risk Strategies article with more information. Previously, employers filing less than 250 Forms 1095 with the IRS were permitted to complete their filing in paper format.

For ACA reporting purposes, this e-filing threshold change for 2024 from 250 to 10 returns will primarily impact those employers who are ALEs, but still under 250 employees. These ALEs who might have historically filed their Forms 1095 in paper format will be required to file them electronically with the IRS in 2024 for the 2023 calendar year.

These employers are strongly encouraged to begin preparations with their benefit administration and/or payroll vendors to transition to electronic filing beginning in 2024.

Previously, employers filing less than 250 Forms 1095 with the IRS were permitted to complete their filing in paper format.

Notably, in the Form 1094 & 1095 instructions, the IRS encourages employers to file electronically even if filing fewer than 10 returns.

ACA Reporting: Alternative Method

The IRS permits certain ACA reporting entities to use an alternative method for furnishing the forms to certain plan participants. The ACA reporting entities that may use this alternative method include:

  • ALE self-funded plan sponsors for plan participants who are part-time employees and non-employees (such as COBRA enrollees or retirees).
  • Non-ALE self-funded/level-funded plan sponsors and health insurance carriers that provide Form 1095-B to their plan participants (as proof of minimum essential coverage).

This alternative method requires these ACA reporting entities to:

  • Post a clear and conspicuous notice on its website by March 1, 2024, and retain in the same location until October 15, 2024. This notice must state that plan participants may receive a copy of their form upon request.
  • Provide the form within 30 days when requested by a plan participant.

Note that ALEs with self-funded group health plans cannot rely on this alternative method to furnish forms to their full-time employees.

ACA Reporting Penalties

The general penalty is $310 for incomplete or incorrect forms, for a total of $620 per employee, and the total penalty for a calendar year not to exceed $3,783,000.

Good faith relief is no longer available for incomplete or incorrect forms. As such, employers are encouraged to review their forms carefully to ensure accuracy and completeness in an effort to avoid large penalties.

Employers who can show reasonable cause for failure to timely or accurately complete their ACA reporting requirements may still be eligible for penalty relief under the standard for a reasonable-cause waiver pursuant to Internal Revenue Code § 6724.

ACA Reporting: State Filing Requirements

The following states and local jurisdictions have enacted individual health insurance mandates, including requirements to:

  • provide information on health insurance coverage to state/local residents, and
  • file the forms with certain state/local tax agencies.

State

Deadline to Provide Forms to Employee Residents

Deadline to File Forms with State/Local Tax Agency

California

January 31, 2024

March 31, 2024 (no penalties assessed if filed by May 31, 2024)

Massachusetts

January 31, 2024

January 31, 2024

New Jersey

March 1, 2024

April 2, 2024

Rhode Island

March 1, 2024

April 1, 2024

Vermont

N/A

N/A (no current reporting requirement)

Washington, D.C.

March 1, 2024

April 30, 2024 (30 days after federal deadline)

We hope that you found this guide useful!

Risk Strategies is here to help. Contact us directly with any questions at benefits@risk-strategies.com.

The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.